Should Australia take a Gamble on Las Vegas’ Zonal Taxation Success?
Alexander Moore
U
nbeknownst to many admirers, the ‘strip’ in Las Vegas, where the world-renowned casinos and tourist attractions are, is located several kilometres outside the southern city limits of Las Vegas in the town of Paradise, Nevada. Development occurred and continues to happen there in the middle of the Mojave Desert because it is outside the city of Las Vegas’ taxation radius. Here, economic activity and investment are more attractive because of the lower sales and other taxes. This environment has contributed to the region’s emergence as a thriving economic powerhouse. What was formerly arid and unpopulated desert nearly doubled its population in the 1990s, continues to experience rapid growth and has cemented itself as one of the world’s premier tourist destinations. Whilst the United States’ tax system is very different to Australia’s, the principle of zonal taxation may 22 | The Brief
provide the key to unlocking our economic potential as a nation. A NSW parliamentary committee conducted an ‘Inquiry into Zonal Taxation’ as recently as 2018 which recommended that the government adopt various regional NSW tax offsets. Even more recently, Australia has just entered its first recession in almost 30 years and its deepest since the 1930s. To get the economy moving again, the government has announced enormous government spending. This spending will contribute to a projected $213.7 billion deficit in the 2020/2021 financial year, the largest since World War Two. If Australia were ever to consider an innovative and alternate solution to bring long term prosperity, it seems now is as fitting as ever. USA and Australian Taxation In the USA, businesses are bound by federal, state, county and city taxes which vary widely depending on their location. Generally, a business’ corporate tax rate Ed.3 2020
